How can I tell if a web design business for sale is really profitable?

A web design studio can report a healthy profit and still be hard to run for anyone but its founder. The owner often designs, sells and fixes things at night, and none of that shows up as a wage. A listing’s profit figure is a starting point. Your job is to find out what it would look like once the work is paid for properly and the income is sorted by how reliable it is.

Put a wage on the owner’s hours

Ask what the owner actually does in a week: design, client calls, quoting, fixing broken sites. If the owner does most of the delivery, the profit includes pay for a job you would either do yourself or have to hire for. Rebuild the figure with a fair wage for each role the owner fills. Your accountant can show you how that changes the result, and it often changes it a lot.

Look for costs that sit off the statements

Studios lean on freelancers for design, development and copy. Check whether every invoice from them is in the books, or whether some are paid personally or folded into another account. Ask for contractor names, what each does, and whether the owner has a standing arrangement with them. Also check software, plug-in and hosting subscriptions. A cost that is missing from the statements is profit that will not be there for you.

Check for unbilled scope and support

Scope creep is quiet. Revisions, small fixes and “quick questions” that never reach an invoice still use up hours. Ask how change requests are handled, whether project time is tracked, and how often projects ran over. Support is the same: a client on a care plan who emails weekly may cost more than the plan brings in.

Separate project income from recurring income

Project fees arrive once and must be won again. Hosting and care plans repeat. Ask for the revenue split, the margin on each, how many clients have stayed, and whose name the hosting accounts are under. A studio living on new projects is a different business from one carried by plans, even if the profit looks the same. See also how to evaluate a business with no online presence.